Ted Cruz hosts a podcast for free — a Ted Cruz super PAC gets paid

That is Scorching PodThe Verge’s e-newsletter about podcasting and the audio trade. Enroll right here for extra.

I hope you all had an ideal weekend/eclipse/first second of NYC sunshine. Right this moment, I’ve acquired a have a look at Ted Cruz’s eyebrow-raising association with iHeart and information on two new acquisitions. Let’s get into it.

iHeart doesn’t pay Ted Cruz for internet hosting Verdict. It pays a Ted Cruz tremendous PAC.

That is definitely one strategy to elevate marketing campaign cash. Sen. Ted Cruz hosts an iHeartMedia podcast, Verdict, which performs moderately effectively amongst right-wing political reveals. He doesn’t receives a commission for internet hosting the podcast, however reporting in current weeks from Forbes and the Houston Chronicle reveals that iHeart has paid greater than $630,000 to a brilliant PAC that helps his marketing campaign. For good cause, this has raised eyebrows, and now a marketing campaign finance watchdog has filed a criticism with the Federal Elections Fee.

That is how the transaction works: Ted Cruz’s management PAC, Jobs, Freedom, and Safety PAC, produces Verdict. The present is then distributed and monetized by Premiere Networks, a subsidiary of iHeartMedia. Then, in response to Premiere Networks, iHeart pays cash created from the present’s advertisements to Reality and Braveness PAC, an impartial political motion committee that helps Cruz’s reelection. “Senator Cruz volunteers his time to host this podcast and isn’t compensated for it,” Rachel Nelson, spokesperson for Premiere Networks, mentioned in an announcement to Scorching Pod final week.

That is technically true in that paying the cash into Reality and Braveness shouldn’t be the identical as paying Cruz immediately. However he clearly sees a private profit, and the Marketing campaign Authorized Heart argues that it crosses the authorized line. “There may be cause to consider Cruz has violated federal marketing campaign finance legal guidelines that prohibit federal candidates and officeholders from soliciting or directing ‘gentle cash’ — together with cash from firms, that are categorically prohibited from contributing to candidates — in connection along with his 2024 reelection efforts,” the group’s criticism reads. Nelson didn’t reply to a request for touch upon the submitting.

Cruz’s camp denies any wrongdoing. “Senator Cruz seems on Verdict thrice per week without cost. He does this to drag again the veil on the corrupt inside workings of Washington — none of which ever get pretty coated,” marketing campaign spokesperson Macarena Martinez informed Scorching Pod in an announcement.

How the FEC guidelines may have large implications for the way politicians are in a position to leverage podcasting for fundraising functions. The everyday election-cycle relationship between campaigns and the massive radio corporations is that these campaigns purchase up numerous spots in native markets — it’s a transaction that financially advantages the radio firm. However the Cruz state of affairs flips that relationship on its head. Cruz will get the publicity whereas additionally making advert cash that then will get funneled, if to not his official marketing campaign, then to entities that help it. It’s not clear how replicable this may even be — Cruz is a star who can command a nationwide viewers and get advert {dollars} — but it surely does set a troubling precedent for the politics-media dynamic.

Behold! Podcast M&A: The Roost acquired by Night time, Sony buys Neon Hum

Not a lot of this nowadays. We have now not one however two acquisitions introduced this week. The Roost, which is the podcasting arm of the just lately shuttered Rooster Enamel, has been bought by influencer expertise company Night time. Neon Hum, which beforehand had Sony Music as an investor, has been purchased outright by the music big. Notably, each corporations supply one thing apart from unique content material.

The Roost, which handles advert gross sales and distribution for The H3 Podcast and The Kinda Humorous Podcast as a part of its community, is the final pillar left standing of Rooster Enamel. Rooster Enamel was shut down final month by mother or father firm Warner Bros. Discovery. The company that’s shopping for it, Night time, represents digital stars like MrBeast and Kai Cenat, so it looks as if a match. Plus, Night time’s president, Ezra Cooperstein, served because the president of Rooster Enamel between 2018 and 2019. In shopping for The Roost, Night time has acquired a podcasting infrastructure that could possibly be prolonged to its priceless roster of purchasers.

With Neon Hum, Sony can be broadening its attain. Along with originals like Smoke Display screen, Neon Hum produced reveals for purchasers like NBC Information and HBO Max. As corporations reduce on their very own podcast items, they flip to manufacturing homes like Neon Hum to keep up a podcast presence. In the same vein, Audacy laid off Pineapple Road Studio staffers who labored on unique reveals with an intention to focus extra on shopper companies.

So, sure: podcast corporations can nonetheless be acquisition targets, however more and more, it’s the much less horny stuff that sells.

That’s all for at the moment! I’ll be again on Thursday.


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